Opinions

Archive for Opinions – Page 101

US debt default could trigger dollar’s collapse – and severely erode America’s political and economic might

By Michael Humphries, Touro University

It’s a case of déjà vu all over again on the debt ceiling debate.

Republicans, who regained control of the House of Representatives in November 2022, are threatening to not allow an increase in the debt limit unless they get unspecified spending cuts in return. In so doing, they risk pushing the U.S. government into default.

Brinkmanship over the debt ceiling has become a regular ritual – it happened under the Clinton administration in 1995, then again with Barack Obama as president in 2011, and more recently in 2021.

As an economist, I know that defaulting on the national debt would have real-life consequences. Even the threat of pushing the U.S. into default has an economic impact. In August 2021, the mere prospect of a potential default led to an unprecedented downgrade of the the nation’s credit rating, hurting America’s financial prestige as well as countless individuals, including retirees.

And that was caused by the mere specter of default. An actual default would be far more damaging.

Dollar’s collapse

Possibly the most serious consequence would be the collapse of the U.S. dollar and its replacement as global trade’s “unit of account.” That essentially means that it is widely used in global finance and trade.

Day to day, most Americans are likely unaware of the economic and political power that goes with being the world’s unit of account. Currently, more than half of world trade – from oil and gold to cars and smartphones – is in U.S. dollars, with the euro accounting for around 30% and all other currencies making up the balance.

As a result of this dominance, the U.S. is the only country on the planet that can pay its foreign debt in its own currency. This gives both the U.S. government and American companies tremendous leeway in international trade and finance.

No matter how much debt the U.S. government owes foreign investors, it can simply print the money needed to pay them back – although for economic reasons, it may not be wise to do so. Other countries must buy either the dollar or the euro to pay their foreign debt. And the only way for them to do so is to either to export more than they import or borrow more dollars or euros on the international market.

The U.S. is free from such constraints and can run up large trade deficits – that is, import more than it exports – for decades without the same consequences.

For American companies, the dominance of the dollar means they aren’t as subject to the exchange rate risk as are their foreign competitors. Exchange rate risk refers to how changes in the relative value of currencies may affect a company’s profitability.

Since international trade is generally denominated in dollars, U.S. businesses can buy and sell in their own currency, something their foreign competitors cannot do as easily. As simple as this sounds, it gives American companies a tremendous competitive advantage.

If Republicans push the U.S. into default, the dollar would likely lose its position as the international unit of account, forcing the government and companies to pay their international bills in another currency.

Loss of political power too

Since most foreign trade is denominated in the dollar, trade must go through an American bank at some point. This is one important way dollar dominance gives the U.S. tremendous political power, especially to punish economic rivals and unfriendly governments.

For example, when former President Donald Trump imposed economic sanctions on Iran, he denied the country access to American banks and to the dollar. He also imposed secondary sanctions, which means that non-American companies trading with Iran were also sanctioned. Given a choice of access to the dollar or trading with Iran, most of the world economies chose access to the dollar and complied with the sanctions. As a result, Iran entered a deep recession, and its currency plummeted about 30%.

President Joe Biden did something similar against Russia in response to its invasion of Ukraine. Limiting Russia’s access to the dollar has helped push the country into a recession that’s bordering on a depression.

No other country today could unilaterally impose this level of economic pain on another country. And all an American president currently needs is a pen.

Rivals rewarded

Another consequence of the dollar’s collapse would be enhancing the position of the U.S.‘s top rival for global influence: China.

While the euro would likely replace the dollar as the world’s primary unit of account, the Chinese yuan would move into second place.

If the yuan were to become an a significant international unit of account, this would enhance China’s international position both economically and politically. As it is, China has been working with the other BRIC countries – Brazil, Russia and India – to accept the yuan as a unit of account. With the other three already resentful of U.S. economic and political dominance, a U.S. default would support that effort.

They may not be alone: Recently, Saudi Arabia suggested it was open to trading some of its oil in currencies other than the dollar – something that would change long-standing policy.

Severe consequences

Beyond the impact on the dollar and the economic and political clout of the U.S., a default would be profoundly felt in many other ways and by countless people.

In the U.S., tens of millions of Americans and thousands of companies that depend on government support could suffer, and the economy would most likely sink into recession – or worse, given the U.S. is already expected to soon suffer a downturn. In addition, retirees could see the worth of their pensions dwindle.

The truth is, we really don’t know what will happen or how bad it will get. The scale of the damage caused by a U.S. default is hard to calculate in advance because it has never happened before.

But there’s one thing we can be certain of. If Republicans take their threat of default too far, the U.S. and Americans will suffer tremendously.

About the Author:

Michael Humphries, Deputy Chair of Business Administration, Touro University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Forex and Currency News Opinions

30 Jan

Trade of the Week: GBPUSD ready to rock

By ForexTime

In recent sessions, GBPUSD has been relatively quiet, trading just below a key resistance level.

But such relative calm could be pierced this week as markets pit the policy signals out of two major central banks against each other:

the US Federal Reserve (a.k.a. the Fed) vs. the Bank of England (BOE).

First, a quick refresher on how FX markets tend to react to central bank policy moves.

Generally, the central bank that can keep raising its interest rates further while its economy can withstand those higher rates (relative to another central bank’s benchmark rates/economy) typically sees its currency strengthen.

And on that premise, GBPUSD has climbed by more than 2.5% so far this year.

The price consolidation seen in the above chart also suggests this FX pair’s next move may be a big one, depending on how the Fed and the BOE act over the coming days.

According to Bloomberg’s FX forecast model, there’s a 72% chance that GBPUSD trades within the 1.2182 – 1.2614 range this week.

Whether this FX pair (nicknamed “cable) goes up or down is likely to depend on which central bank can convince markets that it’s got more rate hikes in store for 2023.

What are markets expecting the Fed and the BOE to do?

Overall, the BOE is expected to hike by a larger amount compared to the Fed:

This week: BOE to hike by 50bps vs. the Fed’s forecasted 25bps hike
This year: BOE expected to hike by 100bps in total (including this week’s expected hikes), compared to the Fed’s forecasted remaining hikes of 50bps

Depending on how much either central bank deviates from the above-listed scenario, that may well determine the size of GBPUSD’s move this week.

Overall, if the BOE confirms this week that it can officially out-hike the Fed, not just this week but also over the coming months, that could trigger the next leg up for GBPUSD.

However, we could be in for a SURPRISE this week, if the:

BOE hints that it’s almost done with its own rate hikes, for fear of incurring too much damage to the UK economy.
Fed reiterates its intentions to keep sending US interest rates higher than the 5% peak that markets are forecasting.
After all, Fed Chair Jerome Powell has often said he wants today’s Fed to avoid the mistakes from the 1970s, when the then-Fed eased up on its rate hikes too soon.

The above scenario (dovish BOE + still-hawkish Fed) may then trigger GBPUSD into unwinding some of its recent gains.

Key levels for GBPUSD:

RESISTANCE

1.24511: this marks the 61.8% Fibonacci retracement level from GBPUSD’s 2022 peak-to-trough action.
Although Pound bulls were fought back at this level in mid-December, they are biding their time once more and consolidating just below this key technical level, awaiting hawkish cues from the BOE to help GBPUSD breach this initial resistance level.
1.265: this area resisted GBPUSD upside at both ends of May 2022, and may do so again in the near future.

SUPPORT

Upper 1.22 region: cycle highs from early August 2022
1.218: around where GBPUSD’s 50-daysimple moving average (SMA) currently lies.

At the time of writing, from current levels just below 1.24, Bloomberg’s FX model is pointing to a slightly likelier chance that GBPUSD would dip below 1.22 (16.5% chance) rather than breach the 1.26 mark (15% chance).

Amid rising expectations for heightened immediate volatility for GBPUSD, it’s increasingly evident that FX markets are on tenterhooks, eager to react to the latest clues out of the Fed and the BOE this week.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Forex and Currency News Opinions

29 Jan

Currency Speculators add to EuroFX bullish bets as EURUSD trades at 1.0900

By InvestMacro

Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday January 24th and shows a quick view of how large market participants (for-profit speculators and commercial traders) were positioned in the futures markets. All currency positions are in direct relation to the US dollar where, for example, a bet for the euro is a bet that the euro will rise versus the dollar while a bet against the euro will be a bet that the euro will decline versus the dollar.

Weekly Speculator Changes led by EuroFX & US Dollar Index

The COT currency market speculator bets were higher this week as six out of the eleven currency markets we cover had higher positioning while the other five markets had lower speculator contracts.

Leading the gains for the currency markets was the EuroFX (7,365 contracts) with the US Dollar Index (1,805 contracts), Japanese Yen (1,326 contracts), British Pound (763 contracts), Brazilian Real (592 contracts) and the Australian Dollar (449 contracts) also showing positive weeks.

The currencies seeing declines in speculator bets on the week were the New Zealand Dollar (-3,884 contracts), the Canadian Dollar (-3,453 contracts), Swiss Franc (-1,567 contracts), Bitcoin (-810 contracts) and the Mexican Peso (-101 contracts) also registering lower bets on the week.

Highlighting the COT currency’s data this week is the strength of the speculator’s positioning in the Euro. Large speculative positions rose this week by over +7,300 contracts and have risen in four out of the past six weeks. Euro weekly positions have now also been higher in sixteen out of the past twenty-one weeks, going from a total of -47,676 contracts on August 30th to this week’s total net position of +134,349 contracts.

The Euro speculator positions have now been above +100,000 contracts for the past thirteen consecutive weeks which is the best streak since early in 2021. The Euro strength index, a measure of positions compared to the past three year’s range, has now moved up to a level of 76 percent strength of last three years.

The Euro exchange rate against the US Dollar hit it’s highest level this week since April above the 1.0900 exchange level. Since October, the Euro has now had higher weekly closes in eleven out of the past fifteen weeks and looks to soon make a run at the psychological 1.1000 level.

Data Snapshot of Forex Market Traders | Columns Legend

Jan-24-2023	OI	OI-Index	Spec-Net	Spec-Index	Com-Net	COM-Index	Smalls-Net	Smalls-Index
USD Index	41,233	48	15,163	50	-17,909	47	2,746	47
EUR	777,569	100	134,349	76	-186,450	23	52,101	62
GBP	194,051	33	-23,934	48	27,654	53	-3,720	51
JPY	173,321	34	-21,635	56	17,145	44	4,490	63
CHF	35,368	20	-9,508	29	11,565	64	-2,057	51
CAD	137,476	22	-30,712	5	29,159	93	1,553	33
AUD	129,490	29	-33,171	54	29,706	41	3,465	61
NZD	32,710	12	2,174	60	-4,241	36	2,067	75
MXN	272,655	83	-48,740	7	42,327	90	6,413	95
RUB	20,930	4	7,543	31	-7,150	69	-393	24
BRL	45,128	34	22,785	70	-23,618	30	833	71
Bitcoin	17,390	93	-1,437	52	912	0	525	25

Strength Scores led by EuroFX & Brazilian Real

COT Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is Extreme-Bullish and below 20 is Extreme-Bearish) showed that the EuroFX (76 percent) and the Brazilian Real (70 percent) lead the currency markets this week. The New Zealand Dollar (60 percent), Japanese Yen (56 percent) and the Australian Dollar (54 percent) come in as the next highest in the weekly strength scores.

On the downside, the Canadian Dollar (5 percent) and the Mexican Peso (7 percent) come in at the lowest strength levels currently and are in Extreme-Bearish territory (below 20 percent). The next lowest strength scores are the Swiss Franc (29 percent) and the British Pound (48 percent).

Strength Statistics:
US Dollar Index (50.2 percent) vs US Dollar Index previous week (47.2 percent)
EuroFX (76.2 percent) vs EuroFX previous week (74.0 percent)
British Pound Sterling (48.5 percent) vs British Pound Sterling previous week (47.8 percent)
Japanese Yen (55.6 percent) vs Japanese Yen previous week (54.7 percent)
Swiss Franc (29.5 percent) vs Swiss Franc previous week (33.6 percent)
Canadian Dollar (5.2 percent) vs Canadian Dollar previous week (9.3 percent)
Australian Dollar (54.1 percent) vs Australian Dollar previous week (53.7 percent)
New Zealand Dollar (60.0 percent) vs New Zealand Dollar previous week (70.4 percent)
Mexican Peso (6.7 percent) vs Mexican Peso previous week (6.8 percent)
Brazilian Real (70.3 percent) vs Brazilian Real previous week (69.7 percent)
Bitcoin (51.9 percent) vs Bitcoin previous week (66.0 percent)

New Zealand Dollar & Brazilian Real top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that the New Zealand Dollar (26 percent) and the Brazilian Real (21 percent) lead the past six weeks trends for the currencies. The Japanese Yen (19 percent), the Swiss Franc (6 percent) and the Australian Dollar (4 percent) are the next highest positive movers in the latest trends data.

The Mexican Peso (-41 percent) leads the downside trend scores currently with Bitcoin (-24 percent), the US Dollar Index (-18 percent) and the Canadian Dollar (-4 percent) following next with lower trend scores.

Strength Trend Statistics:
US Dollar Index (-17.7 percent) vs US Dollar Index previous week (-19.2 percent)
EuroFX (3.0 percent) vs EuroFX previous week (0.6 percent)
British Pound Sterling (1.5 percent) vs British Pound Sterling previous week (3.0 percent)
Japanese Yen (19.4 percent) vs Japanese Yen previous week (26.5 percent)
Swiss Franc (6.1 percent) vs Swiss Franc previous week (11.3 percent)
Canadian Dollar (-4.1 percent) vs Canadian Dollar previous week (-6.2 percent)
Australian Dollar (4.3 percent) vs Australian Dollar previous week (6.4 percent)
New Zealand Dollar (25.9 percent) vs New Zealand Dollar previous week (33.6 percent)
Mexican Peso (-40.6 percent) vs Mexican Peso previous week (-42.1 percent)
Brazilian Real (20.7 percent) vs Brazilian Real previous week (21.4 percent)
Bitcoin (-24.4 percent) vs Bitcoin previous week (-12.1 percent)

Individual COT Forex Markets:

US Dollar Index Futures:

The US Dollar Index large speculator standing this week reached a net position of 15,163 contracts in the data reported through Tuesday. This was a weekly advance of 1,805 contracts from the previous week which had a total of 13,358 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 50.2 percent. The commercials are Bearish with a score of 47.3 percent and the small traders (not shown in chart) are Bearish with a score of 46.6 percent.

US DOLLAR INDEX Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	80.7	2.4	13.6
– Percent of Open Interest Shorts:	44.0	45.8	7.0
– Net Position:	15,163	-17,909	2,746
– Gross Longs:	33,291	981	5,614
– Gross Shorts:	18,128	18,890	2,868
– Long to Short Ratio:	1.8 to 1	0.1 to 1	2.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	50.2	47.3	46.6
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-17.7	16.8	0.5

Euro Currency Futures:

The Euro Currency large speculator standing this week reached a net position of 134,349 contracts in the data reported through Tuesday. This was a weekly advance of 7,365 contracts from the previous week which had a total of 126,984 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 76.2 percent. The commercials are Bearish with a score of 23.1 percent and the small traders (not shown in chart) are Bullish with a score of 62.1 percent.

EURO Currency Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	30.6	55.2	12.4
– Percent of Open Interest Shorts:	13.3	79.2	5.7
– Net Position:	134,349	-186,450	52,101
– Gross Longs:	237,743	429,253	96,793
– Gross Shorts:	103,394	615,703	44,692
– Long to Short Ratio:	2.3 to 1	0.7 to 1	2.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	76.2	23.1	62.1
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	3.0	-8.2	31.0

British Pound Sterling Futures:

The British Pound Sterling large speculator standing this week reached a net position of -23,934 contracts in the data reported through Tuesday. This was a weekly rise of 763 contracts from the previous week which had a total of -24,697 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 48.5 percent. The commercials are Bullish with a score of 52.9 percent and the small traders (not shown in chart) are Bullish with a score of 50.7 percent.

BRITISH POUND Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	17.9	65.6	13.6
– Percent of Open Interest Shorts:	30.2	51.3	15.5
– Net Position:	-23,934	27,654	-3,720
– Gross Longs:	34,756	127,207	26,309
– Gross Shorts:	58,690	99,553	30,029
– Long to Short Ratio:	0.6 to 1	1.3 to 1	0.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	48.5	52.9	50.7
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	1.5	-2.5	3.6

Japanese Yen Futures:

The Japanese Yen large speculator standing this week reached a net position of -21,635 contracts in the data reported through Tuesday. This was a weekly advance of 1,326 contracts from the previous week which had a total of -22,961 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 55.6 percent. The commercials are Bearish with a score of 44.0 percent and the small traders (not shown in chart) are Bullish with a score of 62.6 percent.

JAPANESE YEN Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	15.9	65.4	17.9
– Percent of Open Interest Shorts:	28.4	55.6	15.3
– Net Position:	-21,635	17,145	4,490
– Gross Longs:	27,620	113,437	31,009
– Gross Shorts:	49,255	96,292	26,519
– Long to Short Ratio:	0.6 to 1	1.2 to 1	1.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	55.6	44.0	62.6
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	19.4	-20.4	21.0

Swiss Franc Futures:

The Swiss Franc large speculator standing this week reached a net position of -9,508 contracts in the data reported through Tuesday. This was a weekly reduction of -1,567 contracts from the previous week which had a total of -7,941 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 29.5 percent. The commercials are Bullish with a score of 64.1 percent and the small traders (not shown in chart) are Bullish with a score of 50.6 percent.

SWISS FRANC Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	10.2	57.1	32.6
– Percent of Open Interest Shorts:	37.1	24.4	38.4
– Net Position:	-9,508	11,565	-2,057
– Gross Longs:	3,624	20,185	11,540
– Gross Shorts:	13,132	8,620	13,597
– Long to Short Ratio:	0.3 to 1	2.3 to 1	0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	29.5	64.1	50.6
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	6.1	-7.3	7.1

Canadian Dollar Futures:

The Canadian Dollar large speculator standing this week reached a net position of -30,712 contracts in the data reported through Tuesday. This was a weekly fall of -3,453 contracts from the previous week which had a total of -27,259 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 5.2 percent. The commercials are Bullish-Extreme with a score of 93.0 percent and the small traders (not shown in chart) are Bearish with a score of 33.2 percent.

CANADIAN DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	18.9	56.4	22.5
– Percent of Open Interest Shorts:	41.2	35.2	21.4
– Net Position:	-30,712	29,159	1,553
– Gross Longs:	25,978	77,571	30,927
– Gross Shorts:	56,690	48,412	29,374
– Long to Short Ratio:	0.5 to 1	1.6 to 1	1.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	5.2	93.0	33.2
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-4.1	3.5	-1.6

Australian Dollar Futures:

The Australian Dollar large speculator standing this week reached a net position of -33,171 contracts in the data reported through Tuesday. This was a weekly rise of 449 contracts from the previous week which had a total of -33,620 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 54.1 percent. The commercials are Bearish with a score of 41.0 percent and the small traders (not shown in chart) are Bullish with a score of 60.9 percent.

AUSTRALIAN DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	22.8	57.8	17.7
– Percent of Open Interest Shorts:	48.4	34.8	15.0
– Net Position:	-33,171	29,706	3,465
– Gross Longs:	29,466	74,818	22,903
– Gross Shorts:	62,637	45,112	19,438
– Long to Short Ratio:	0.5 to 1	1.7 to 1	1.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	54.1	41.0	60.9
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	4.3	-9.8	20.7

New Zealand Dollar Futures:

The New Zealand Dollar large speculator standing this week reached a net position of 2,174 contracts in the data reported through Tuesday. This was a weekly decrease of -3,884 contracts from the previous week which had a total of 6,058 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 60.0 percent. The commercials are Bearish with a score of 36.5 percent and the small traders (not shown in chart) are Bullish with a score of 75.4 percent.

NEW ZEALAND DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	31.1	50.9	15.5
– Percent of Open Interest Shorts:	24.4	63.9	9.2
– Net Position:	2,174	-4,241	2,067
– Gross Longs:	10,170	16,662	5,077
– Gross Shorts:	7,996	20,903	3,010
– Long to Short Ratio:	1.3 to 1	0.8 to 1	1.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	60.0	36.5	75.4
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	25.9	-24.4	7.6

Mexican Peso Futures:

The Mexican Peso large speculator standing this week reached a net position of -48,740 contracts in the data reported through Tuesday. This was a weekly decline of -101 contracts from the previous week which had a total of -48,639 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 6.7 percent. The commercials are Bullish-Extreme with a score of 90.3 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 95.3 percent.

MEXICAN PESO Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	54.4	42.2	3.2
– Percent of Open Interest Shorts:	72.3	26.7	0.8
– Net Position:	-48,740	42,327	6,413
– Gross Longs:	148,265	115,053	8,628
– Gross Shorts:	197,005	72,726	2,215
– Long to Short Ratio:	0.8 to 1	1.6 to 1	3.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	6.7	90.3	95.3
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-40.6	39.2	5.6

Brazilian Real Futures:

The Brazilian Real large speculator standing this week reached a net position of 22,785 contracts in the data reported through Tuesday. This was a weekly gain of 592 contracts from the previous week which had a total of 22,193 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 70.3 percent. The commercials are Bearish with a score of 30.3 percent and the small traders (not shown in chart) are Bullish with a score of 71.4 percent.

BRAZIL REAL Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	79.1	13.0	7.9
– Percent of Open Interest Shorts:	28.6	65.3	6.1
– Net Position:	22,785	-23,618	833
– Gross Longs:	35,691	5,847	3,585
– Gross Shorts:	12,906	29,465	2,752
– Long to Short Ratio:	2.8 to 1	0.2 to 1	1.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	70.3	30.3	71.4
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	20.7	-18.9	-14.2

Bitcoin Futures:

The Bitcoin large speculator standing this week reached a net position of -1,437 contracts in the data reported through Tuesday. This was a weekly decrease of -810 contracts from the previous week which had a total of -627 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 51.9 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish with a score of 24.9 percent.

BITCOIN Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	75.0	7.8	8.4
– Percent of Open Interest Shorts:	83.2	2.6	5.4
– Net Position:	-1,437	912	525
– Gross Longs:	13,036	1,365	1,467
– Gross Shorts:	14,473	453	942
– Long to Short Ratio:	0.9 to 1	3.0 to 1	1.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	51.9	100.0	24.9
– Strength Index Reading (3 Year Range):	Bullish	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-24.4	59.0	1.7

Article By InvestMacro – Receive our weekly COT Newsletter

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting). See CFTC criteria here.

COT Updates Forex and Currency News Opinions

29 Jan

COT Bonds Speculators cut back on Eurodollar bearish bets for 10th time in 11 weeks

By InvestMacro

Here are the latest charts and statistics for the Commitment of Traders (COT) reports data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday January 24th and shows a quick view of how large traders (for-profit speculators and commercial hedgers) were positioned in the futures markets.

Weekly Speculator Changes led by Fed Funds & 5-Year Bonds

The COT bond market speculator bets were higher this week as five out of the eight bond markets we cover had higher positioning while the other three markets had lower speculator contracts.

Leading the gains for the bond markets was the Fed Funds (50,405 contracts) with the 5-Year Bonds (41,918 contracts), the Eurodollar (39,979 contracts), the 10-Year Bonds (3,236 contracts), and the Ultra 10-Year Bonds (410 contracts) also showing positive weeks.

The bond markets with declines in speculator bets for the week were the Ultra Treasury Bonds (-29,935 contracts), the US Treasury Bonds (-3,423 contracts) and the 2-Year Bonds (-14,352 contracts) also registering lower bets on the week.

Highlighting the COT bond’s data this week is the continued improvement of the speculator positioning in the Eurodollar. Large speculative positions for the Eurodollar rose this week by almost +40,000 contracts and have now improved (or become less bearish) in ten out of the past eleven weeks. This recent improvement has taken +1,098,777 contracts off of the overall bearish position, going from a total bearish net position of -2,112,650 contracts on November 8th to this week’s total net position of -1,013,873 contracts (an improvement of approximately 50 percent).

Eurodollar futures contracts are one of the largest futures markets and are essentially a bet on short-term interest rates. As Eurodollar prices fall, the implied interest rises (and vice versa) and at this moment, the price of Eurodollar futures is approximately 95.00 for an implied interest rate of 5.00 percent.

The decrease in the bearish positioning of speculators suggests that traders are anticipating a possible peak has happened in the short-term interest rates. This is likely due to falling inflation and anticipation of the US Federal Reserve slowing their interest rate hikes.

Data Snapshot of Bond Market Traders | Columns Legend

Jan-24-2023	OI	OI-Index	Spec-Net	Spec-Index	Com-Net	COM-Index	Smalls-Net	Smalls-Index
Eurodollar	5,949,563	1	-1,013,873	34	1,212,772	63	-198,899	61
FedFunds	1,798,641	72	-35,830	35	61,847	67	-26,017	0
2-Year	2,416,615	29	-477,023	16	454,881	79	22,142	62
Long T-Bond	1,235,758	50	-195,816	21	155,710	66	40,106	84
10-Year	4,124,381	73	-541,821	0	598,839	93	-57,018	67
5-Year	4,162,628	61	-638,737	7	633,820	84	4,917	82

Strength Scores led by Fed Funds & Eurodollar

COT Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is Extreme-Bullish and below 20 is Extreme-Bearish) showed that the Fed Funds (35 percent) and the Eurodollar (34 percent) lead the bond markets this week. The US Treasury Bonds (21 percent) comes in as the next highest in the weekly strength scores.

On the downside, the Ultra 10-Year Bonds (0 percent), the 10-Year Bonds (0 percent), the Ultra Treasury Bonds (5 percent), the 5-Year Bond (6.7 percent) and the 2-Year Bond (16.2 percent) come in at the lowest strength levels currently and are all in Extreme-Bearish territory (below 20 percent).

Strength Statistics:
Fed Funds (35.2 percent) vs Fed Funds previous week (29.0 percent)
2-Year Bond (16.2 percent) vs 2-Year Bond previous week (18.3 percent)
5-Year Bond (6.7 percent) vs 5-Year Bond previous week (1.4 percent)
10-Year Bond (0.4 percent) vs 10-Year Bond previous week (0.0 percent)
Ultra 10-Year Bond (0.1 percent) vs Ultra 10-Year Bond previous week (0.0 percent)
US Treasury Bond (20.9 percent) vs US Treasury Bond previous week (22.0 percent)
Ultra US Treasury Bond (4.8 percent) vs Ultra US Treasury Bond previous week (18.6 percent)
Eurodollar (34.5 percent) vs Eurodollar previous week (33.8 percent)

Eurodollar & 2-Year Bonds top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that the Eurodollar (11 percent) and the 2-Year Bonds (7 percent) lead the past six weeks trends for bonds. The 5-Year Bonds (7 percent) is the next highest positive movers in the latest trends data.

The US Treasury Bonds (-26 percent) leads the downside trend scores currently with the 10-Year Bonds (-23 percent) and the Ultra Treasury Bonds (-22 percent) following next with lower trend scores.

Strength Trend Statistics:
Fed Funds (4.7 percent) vs Fed Funds previous week (-0.9 percent)
2-Year Bond (6.6 percent) vs 2-Year Bond previous week (10.7 percent)
5-Year Bond (6.7 percent) vs 5-Year Bond previous week (-2.8 percent)
10-Year Bond (-22.8 percent) vs 10-Year Bond previous week (-24.2 percent)
Ultra 10-Year Bond (-6.1 percent) vs Ultra 10-Year Bond previous week (-4.8 percent)
US Treasury Bond (-25.7 percent) vs US Treasury Bond previous week (-25.1 percent)
Ultra US Treasury Bond (-22.2 percent) vs Ultra US Treasury Bond previous week (-6.3 percent)
Eurodollar (11.1 percent) vs Eurodollar previous week (10.9 percent)

Individual Bond Markets:

3-Month Eurodollars Futures:

The 3-Month Eurodollars large speculator standing this week totaled a net position of -1,013,873 contracts in the data reported through Tuesday. This was a weekly boost of 39,979 contracts from the previous week which had a total of -1,053,852 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 34.5 percent. The commercials are Bullish with a score of 62.8 percent and the small traders (not shown in chart) are Bullish with a score of 60.7 percent.

3-Month Eurodollars Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	8.8	68.5	5.0
– Percent of Open Interest Shorts:	25.8	48.1	8.3
– Net Position:	-1,013,873	1,212,772	-198,899
– Gross Longs:	522,881	4,073,591	295,903
– Gross Shorts:	1,536,754	2,860,819	494,802
– Long to Short Ratio:	0.3 to 1	1.4 to 1	0.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	34.5	62.8	60.7
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	11.1	-11.3	7.5

30-Day Federal Funds Futures:

The 30-Day Federal Funds large speculator standing this week totaled a net position of -35,830 contracts in the data reported through Tuesday. This was a weekly advance of 50,405 contracts from the previous week which had a total of -86,235 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 35.2 percent. The commercials are Bullish with a score of 67.4 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 0.0 percent.

30-Day Federal Funds Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	9.7	75.4	1.8
– Percent of Open Interest Shorts:	11.7	72.0	3.2
– Net Position:	-35,830	61,847	-26,017
– Gross Longs:	174,466	1,356,289	31,773
– Gross Shorts:	210,296	1,294,442	57,790
– Long to Short Ratio:	0.8 to 1	1.0 to 1	0.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	35.2	67.4	0.0
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	4.7	-2.6	-45.1

2-Year Treasury Note Futures:

The 2-Year Treasury Note large speculator standing this week totaled a net position of -477,023 contracts in the data reported through Tuesday. This was a weekly lowering of -14,352 contracts from the previous week which had a total of -462,671 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 16.2 percent. The commercials are Bullish with a score of 79.5 percent and the small traders (not shown in chart) are Bullish with a score of 61.9 percent.

2-Year Treasury Note Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	7.7	81.6	8.6
– Percent of Open Interest Shorts:	27.5	62.8	7.7
– Net Position:	-477,023	454,881	22,142
– Gross Longs:	186,740	1,972,486	207,471
– Gross Shorts:	663,763	1,517,605	185,329
– Long to Short Ratio:	0.3 to 1	1.3 to 1	1.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	16.2	79.5	61.9
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	6.6	-9.7	8.7

5-Year Treasury Note Futures:

The 5-Year Treasury Note large speculator standing this week totaled a net position of -638,737 contracts in the data reported through Tuesday. This was a weekly rise of 41,918 contracts from the previous week which had a total of -680,655 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 6.7 percent. The commercials are Bullish-Extreme with a score of 84.1 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 82.4 percent.

5-Year Treasury Note Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	6.2	83.8	8.5
– Percent of Open Interest Shorts:	21.6	68.6	8.4
– Net Position:	-638,737	633,820	4,917
– Gross Longs:	259,978	3,489,305	354,429
– Gross Shorts:	898,715	2,855,485	349,512
– Long to Short Ratio:	0.3 to 1	1.2 to 1	1.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	6.7	84.1	82.4
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	6.7	-15.9	24.0

10-Year Treasury Note Futures:

The 10-Year Treasury Note large speculator standing this week totaled a net position of -541,821 contracts in the data reported through Tuesday. This was a weekly boost of 3,236 contracts from the previous week which had a total of -545,057 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.4 percent. The commercials are Bullish-Extreme with a score of 93.0 percent and the small traders (not shown in chart) are Bullish with a score of 66.5 percent.

10-Year Treasury Note Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	8.7	80.3	8.7
– Percent of Open Interest Shorts:	21.8	65.7	10.1
– Net Position:	-541,821	598,839	-57,018
– Gross Longs:	359,177	3,310,111	360,007
– Gross Shorts:	900,998	2,711,272	417,025
– Long to Short Ratio:	0.4 to 1	1.2 to 1	0.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	0.4	93.0	66.5
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-22.8	14.7	9.8

Ultra 10-Year Notes Futures:

The Ultra 10-Year Notes large speculator standing this week totaled a net position of -125,911 contracts in the data reported through Tuesday. This was a weekly lift of 410 contracts from the previous week which had a total of -126,321 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.1 percent. The commercials are Bullish-Extreme with a score of 95.9 percent and the small traders (not shown in chart) are Bullish with a score of 66.7 percent.

Ultra 10-Year Notes Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	10.7	77.5	10.5
– Percent of Open Interest Shorts:	19.2	62.9	16.6
– Net Position:	-125,911	216,769	-90,858
– Gross Longs:	158,914	1,148,114	155,215
– Gross Shorts:	284,825	931,345	246,073
– Long to Short Ratio:	0.6 to 1	1.2 to 1	0.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	0.1	95.9	66.7
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-6.1	5.5	1.8

US Treasury Bonds Futures:

The US Treasury Bonds large speculator standing this week totaled a net position of -195,816 contracts in the data reported through Tuesday. This was a weekly reduction of -3,423 contracts from the previous week which had a total of -192,393 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 20.9 percent. The commercials are Bullish with a score of 66.1 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 84.4 percent.

US Treasury Bonds Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	4.2	80.9	14.5
– Percent of Open Interest Shorts:	20.0	68.3	11.2
– Net Position:	-195,816	155,710	40,106
– Gross Longs:	51,463	1,000,159	178,920
– Gross Shorts:	247,279	844,449	138,814
– Long to Short Ratio:	0.2 to 1	1.2 to 1	1.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	20.9	66.1	84.4
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-25.7	28.3	-0.3

Ultra US Treasury Bonds Futures:

The Ultra US Treasury Bonds large speculator standing this week totaled a net position of -415,363 contracts in the data reported through Tuesday. This was a weekly lowering of -29,935 contracts from the previous week which had a total of -385,428 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 4.8 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bullish with a score of 73.0 percent.

Ultra US Treasury Bonds Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	3.8	84.4	11.7
– Percent of Open Interest Shorts:	32.9	58.8	8.2
– Net Position:	-415,363	365,215	50,148
– Gross Longs:	53,821	1,203,706	166,548
– Gross Shorts:	469,184	838,491	116,400
– Long to Short Ratio:	0.1 to 1	1.4 to 1	1.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	4.8	100.0	73.0
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-22.2	30.9	-5.1

Article By InvestMacro – Receive our weekly COT Newsletter

Bonds COT Updates Opinions

28 Jan

Speculators Weekly: Soybean Meal, Heating Oil & Wheat lead Bullish & Bearish Positions

By InvestMacro

The latest update for the weekly Commitment of Traders (COT) report was released by the Commodity Futures Trading Commission (CFTC) on Friday for data ending on January 24th.

This weekly Extreme Positions report highlights the Most Bullish and Most Bearish Positions for the speculator category. Extreme positioning in these markets can foreshadow strong moves in the underlying market.

To signify an extreme position, we use the Strength Index (also known as the COT Index) of each instrument, a common method of measuring COT data. The Strength Index is simply a comparison of current trader positions against the range of positions over the previous 3 years. We use over 80 percent as extremely bullish and under 20 percent as extremely bearish. (Compare Strength Index scores across all markets in the data table or cot leaders table)

Here Are This Week’s Most Bullish Speculator Positions:

Soybean Meal

The Soybean Meal speculator position comes in as the most bullish extreme standing again this week and has been for multiple weeks. The Soybean Meal speculator level is currently at a 92.3 percent score of its 3-year range.

The six-week trend for the percent strength score totaled 7.5 this week. The overall net speculator position was a total of 149,785 net contracts this week with a change of -16,565 contract in the weekly speculator bets.

Heating Oil

The Heating Oil speculator position comes next in the extreme standings this week. The Heating Oil speculator level is now at a 79.7 percent score of its 3-year range.

The six-week trend for the percent strength score was 11.8 this week. The speculator position registered 25,360 net contracts this week with a weekly change of 6,854 contracts in speculator bets.

Euro

The Euro speculator position comes in third this week in the extreme standings. The Euro speculator level resides at a 76.2 percent score of its 3-year range.

The six-week trend for the speculator strength score came in at 3.0 this week. The overall speculator position was 134,349 net contracts this week with a change of 7,365 contracts in the weekly speculator bets.

VIX

The VIX speculator position comes up number four in the extreme standings this week. The VIX speculator level is at a 76.0 percent score of its 3-year range.

The six-week trend for the speculator strength score totaled a change of 20.6 this week. The overall speculator position was -53,149 net contracts this week with a change of -794 contracts in the speculator bets.

Brazil Real

The Brazil Real speculator position rounds out the top five in this week’s bullish extreme standings. The Brazil Real speculator level sits at a 70.3 percent score of its 3-year range. The six-week trend for the speculator strength score was 20.7 this week.

The speculator position was 22,785 net contracts this week with a change of 592 contracts in the weekly speculator bets.

This Week’s Most Bearish Speculator Positions:

Wheat

The Wheat speculator position comes in as the most bearish extreme standing this week. The Wheat speculator level is at a 0.0 percent score of its 3-year range.

The six-week trend for the speculator strength score was -7.6 this week. The overall speculator position was -48,320 net contracts this week with a change of -6,306 contracts in the speculator bets.

Ultra 10-Year U.S. T-Note

The Ultra 10-Year U.S. T-Note speculator position comes in next for the most bearish extreme standing on the week. The Ultra 10-Year U.S. T-Note speculator level is at a 0.1 percent score of its 3-year range.

The six-week trend for the speculator strength score was -6.1 this week. The speculator position was -125,911 net contracts this week with a change of 410 contracts in the weekly speculator bets.

Lean Hogs

The Lean Hogs speculator position comes in as third most bearish extreme standing of the week. The Lean Hogs speculator level resides at a 0.4 percent score of its 3-year range.

The six-week trend for the speculator strength score was -36.8 this week. The overall speculator position was 3,166 net contracts this week with a change of -12,741 contracts in the speculator bets.

10-Year Note

The 10-Year Note speculator position comes in as this week’s fourth most bearish extreme standing. The 10-Year Note speculator level is at a 0.4 percent score of its 3-year range.

The six-week trend for the speculator strength score was -22.8 this week. The speculator position was -541,821 net contracts this week with a change of 3,236 contracts in the weekly speculator bets.

MSCI EAFE MINI

Finally, the MSCI EAFE MINI speculator position comes in as the fifth most bearish extreme standing for this week. The MSCI EAFE MINI speculator level is at a 2.4 percent score of its 3-year range.

The six-week trend for the speculator strength score was -23.7 this week. The speculator position was -34,202 net contracts this week with a change of -5,924 contracts in the weekly speculator bets.

Speculators or Non-Commercials Notes:

Speculators, classified as non-commercial traders by the CFTC, are made up of large commodity funds, hedge funds and other significant for-profit participants. The Specs are generally regarded as trend-followers in their behavior towards price action – net speculator bets and prices tend to go in the same directions. These traders often look to buy when prices are rising and sell when prices are falling. To illustrate this point, many times speculator contracts can be found at their most extremes (bullish or bearish) when prices are also close to their highest or lowest levels.

These extreme levels can be dangerous for the large speculators as the trade is most crowded, there is less trading ammunition still sitting on the sidelines to push the trend further and prices have moved a significant distance. When the trend becomes exhausted, some speculators take profits while others look to also exit positions when prices fail to continue in the same direction. This process usually plays out over many months to years and can ultimately create a reverse effect where prices start to fall and speculators start a process of selling when prices are falling.

Article By InvestMacro – Receive our weekly COT Newsletter

COT Updates Opinions

28 Jan

Large Metals Speculators continue to boost Gold bullish bets to 30-week high

By InvestMacro

Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday January 24th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets.

Weekly Speculator Changes led by Gold & Copper

The COT metals markets speculator bets were lower this week as two out of the five precious metals markets we cover had higher positioning while the other three markets had lower speculator contracts.

Leading the gains for the metals was Gold (4,433 contracts) with Copper (3,932 contracts) also showing a positive week.

The markets with declines in speculator bets for the week were Silver (-5,784 contracts), Platinum (-3,283 contracts) and Palladium (-546 contracts) also seeing lower bets on the week.

Highlighting the COT metals data this week is the continued bullishness for the Gold speculative positions. The large speculator position in Gold futures advanced once again this week for an eighth straight week and for the tenth time out of the past twelve weeks. The Gold position has now risen from a total of +64,623 contracts on November 1st to a new 30-week high at a total of +157,673 contracts this week.

The Gold futures price closed slightly higher again this week and has now been up for six consecutive weeks. This week’s high was right below the $1,950.00 level and marked the highest Gold prices have reached since April. Gold may be due for a breather with the daily RSI Indicator showing overbought levels but with the US Dollar trending lower, Gold may have a bright outlook in 2023.

Data Snapshot of Commodity Market Traders | Columns Legend

Jan-24-2023	OI	OI-Index	Spec-Net	Spec-Index	Com-Net	COM-Index	Smalls-Net	Smalls-Index
Gold	499,927	25	157,673	35	-180,554	63	22,881	37
Silver	134,922	12	25,684	42	-39,461	58	13,777	41
Copper	213,398	52	20,170	52	-26,542	46	6,372	62
Palladium	9,363	20	-3,297	8	3,534	91	-237	27
Platinum	72,613	46	20,261	39	-25,819	61	5,558	42

Strength Scores led by Copper & Silver

COT Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is Extreme-Bullish and below 20 is Extreme-Bearish) showed that the Copper (52 percent) leads the metals markets this week. Silver (42 percent) comes in as the next highest in the weekly strength scores.

On the downside, Palladium (8 percent) comes in at the lowest strength level currently and is in Extreme-Bearish territory (below 20 percent). The next lowest strength score was Gold (35 percent).

Strength Statistics:
Gold (35.0 percent) vs Gold previous week (33.5 percent)
Silver (42.4 percent) vs Silver previous week (48.8 percent)
Copper (52.4 percent) vs Copper previous week (49.2 percent)
Platinum (38.8 percent) vs Platinum previous week (43.6 percent)
Palladium (7.5 percent) vs Palladium previous week (12.9 percent)

Copper & Gold top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that Copper (14 percent) leads the past six weeks trends for metals. Gold (11 percent) is the next highest positive mover in the latest trends data.

Palladium (-24 percent) leads the downside trend scores currently with Platinum (-12 percent) as the next market with lower trend scores.

Move Statistics:
Gold (10.6 percent) vs Gold previous week (12.6 percent)
Silver (3.2 percent) vs Silver previous week (13.5 percent)
Copper (14.0 percent) vs Copper previous week (11.6 percent)
Platinum (-11.8 percent) vs Platinum previous week (-3.0 percent)
Palladium (-23.9 percent) vs Palladium previous week (-13.7 percent)

Individual Markets:

Gold Comex Futures:

The Gold Comex Futures large speculator standing this week totaled a net position of 157,673 contracts in the data reported through Tuesday. This was a weekly boost of 4,433 contracts from the previous week which had a total of 153,240 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 35.0 percent. The commercials are Bullish with a score of 63.4 percent and the small traders (not shown in chart) are Bearish with a score of 37.3 percent.

Gold Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	50.7	25.5	9.6
– Percent of Open Interest Shorts:	19.1	61.6	5.0
– Net Position:	157,673	-180,554	22,881
– Gross Longs:	253,311	127,419	47,880
– Gross Shorts:	95,638	307,973	24,999
– Long to Short Ratio:	2.6 to 1	0.4 to 1	1.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	35.0	63.4	37.3
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	10.6	-13.0	25.1

Silver Comex Futures:

The Silver Comex Futures large speculator standing this week totaled a net position of 25,684 contracts in the data reported through Tuesday. This was a weekly decline of -5,784 contracts from the previous week which had a total of 31,468 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 42.4 percent. The commercials are Bullish with a score of 57.9 percent and the small traders (not shown in chart) are Bearish with a score of 41.0 percent.

Silver Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	41.2	35.1	17.7
– Percent of Open Interest Shorts:	22.2	64.3	7.5
– Net Position:	25,684	-39,461	13,777
– Gross Longs:	55,595	47,359	23,875
– Gross Shorts:	29,911	86,820	10,098
– Long to Short Ratio:	1.9 to 1	0.5 to 1	2.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	42.4	57.9	41.0
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	3.2	-3.5	4.2

Copper Grade #1 Futures:

The Copper Grade #1 Futures large speculator standing this week totaled a net position of 20,170 contracts in the data reported through Tuesday. This was a weekly increase of 3,932 contracts from the previous week which had a total of 16,238 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 52.4 percent. The commercials are Bearish with a score of 46.4 percent and the small traders (not shown in chart) are Bullish with a score of 62.1 percent.

Copper Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	41.2	35.0	9.3
– Percent of Open Interest Shorts:	31.8	47.4	6.3
– Net Position:	20,170	-26,542	6,372
– Gross Longs:	87,941	74,715	19,913
– Gross Shorts:	67,771	101,257	13,541
– Long to Short Ratio:	1.3 to 1	0.7 to 1	1.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	52.4	46.4	62.1
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	14.0	-15.5	13.7

Platinum Futures:

The Platinum Futures large speculator standing this week totaled a net position of 20,261 contracts in the data reported through Tuesday. This was a weekly fall of -3,283 contracts from the previous week which had a total of 23,544 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 38.8 percent. The commercials are Bullish with a score of 60.9 percent and the small traders (not shown in chart) are Bearish with a score of 42.5 percent.

Platinum Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	54.1	30.9	11.3
– Percent of Open Interest Shorts:	26.2	66.4	3.6
– Net Position:	20,261	-25,819	5,558
– Gross Longs:	39,279	22,428	8,206
– Gross Shorts:	19,018	48,247	2,648
– Long to Short Ratio:	2.1 to 1	0.5 to 1	3.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	38.8	60.9	42.5
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-11.8	9.2	18.3

Palladium Futures:

The Palladium Futures large speculator standing this week totaled a net position of -3,297 contracts in the data reported through Tuesday. This was a weekly decline of -546 contracts from the previous week which had a total of -2,751 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 7.5 percent. The commercials are Bullish-Extreme with a score of 91.1 percent and the small traders (not shown in chart) are Bearish with a score of 27.5 percent.

Palladium Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	19.1	62.2	12.9
– Percent of Open Interest Shorts:	54.3	24.5	15.5
– Net Position:	-3,297	3,534	-237
– Gross Longs:	1,787	5,826	1,212
– Gross Shorts:	5,084	2,292	1,449
– Long to Short Ratio:	0.4 to 1	2.5 to 1	0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	7.5	91.1	27.5
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-23.9	24.3	-16.0

Article By InvestMacro – Receive our weekly COT Newsletter

COT Updates Metals Opinions

28 Jan

Soft Commodities Speculators drop Lean Hogs bets for 4th week to 134-week low

By InvestMacro

Here are the latest charts and statistics for the Commitment of Traders (COT) reports data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday January 24th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets.

Weekly Speculator Changes led by Cotton & Corn

The COT soft commodities markets speculator bets were lower this week as just three out of the eleven softs markets we cover had higher positioning while the other eight markets had lower speculator contracts.

Leading the gains for the softs markets was Cotton (9,880 contracts) with Corn (5,496 contracts) and Coffee (4,017 contracts) also having positive weeks.

The markets with the declines in speculator bets this week were Soybean Oil (-20,245 contracts) with Soybean Meal (-16,565 contracts), Soybeans (-13,843 contracts), Lean Hogs (-12,741 contracts), Live Cattle (-7,915 contracts), Wheat (-6,306 contracts), Cocoa (-2,757 contracts) and Sugar (-1,614 contracts) also registering lower bets on the week.

Highlighting the COT soft commodities data this week is the swift and strong decrease in the Lean Hogs speculator’s positioning. The large speculator bets for Lean Hogs fell this week for a fourth consecutive week (by a total of -41,547 contracts) and for the sixth time in the past nine weeks.

The speculator’s net position has dropped from a total of +44,713 contracts on December 27th to an overall bullish level of just +3,166 contracts this week. This recent weakness in speculator sentiment has now pushed the overall net position standing for Lean Hogs to the lowest level in the past 134 weeks, dating back to June 30th of 2020.

Lean Hogs prices have been under pressure since reaching a recent high in July above the 115.00 price level as the market has responded to ample hogs supply. Since then, the Lean Hog futures price (front-month) has fallen by over 30 percent and closed this week at the lowest level since late in 2021.

Data Snapshot of Commodity Market Traders | Columns Legend

Jan-24-2023	OI	OI-Index	Spec-Net	Spec-Index	Com-Net	COM-Index	Smalls-Net	Smalls-Index
WTI Crude	1,660,450	23	249,799	12	-273,246	88	23,447	38
Gold	499,927	25	157,673	35	-180,554	63	22,881	37
Silver	134,922	12	25,684	42	-39,461	58	13,777	41
Copper	213,398	52	20,170	52	-26,542	46	6,372	62
Palladium	9,363	20	-3,297	8	3,534	91	-237	27
Platinum	72,613	46	20,261	39	-25,819	61	5,558	42
Natural Gas	1,102,760	27	-170,972	24	138,482	78	32,490	57
Brent	153,686	14	-36,800	41	33,917	57	2,883	48
Heating Oil	278,159	27	25,360	80	-48,540	20	23,180	79
Soybeans	667,416	20	155,222	59	-117,945	52	-37,277	8
Corn	1,274,410	11	277,369	65	-205,662	43	-71,707	2
Coffee	231,360	35	-22,728	4	20,167	96	2,561	35
Sugar	924,848	42	185,084	58	-229,339	37	44,255	63
Wheat	350,331	27	-48,320	0	50,423	100	-2,103	99

Strength Scores led by Soybean Meal & Corn

COT Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is Extreme-Bullish and below 20 is Extreme-Bearish) showed that Soybean Meal (92 percent) and Corn (65 percent) lead the softs markets this week. Live Cattle (62 percent), Soybeans (59 percent) and Sugar (58 percent) come in as the next highest in the weekly strength scores.

On the downside, Lean Hogs (0 percent), Wheat (0 percent) and Coffee (4 percent) come in at the lowest strength levels currently and are in Extreme-Bearish territory (below 20 percent).

Strength Statistics:
Corn (65.5 percent) vs Corn previous week (64.8 percent)
Sugar (57.6 percent) vs Sugar previous week (58.1 percent)
Coffee (4.1 percent) vs Coffee previous week (0.0 percent)
Soybeans (59.4 percent) vs Soybeans previous week (63.9 percent)
Soybean Oil (29.9 percent) vs Soybean Oil previous week (43.8 percent)
Soybean Meal (92.3 percent) vs Soybean Meal previous week (100.0 percent)
Live Cattle (62.4 percent) vs Live Cattle previous week (72.3 percent)
Lean Hogs (0.4 percent) vs Lean Hogs previous week (15.8 percent)
Cotton (20.9 percent) vs Cotton previous week (13.3 percent)
Cocoa (41.5 percent) vs Cocoa previous week (44.2 percent)
Wheat (0.0 percent) vs Wheat previous week (5.7 percent)

Soybeans & Live Cattle top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that Soybeans (13 percent) and Live Cattle (9 percent) lead the past six weeks trends for soft commodities. Corn (8 percent), Soybean Meal (8 percent) and Cotton (3 percent) are the next highest positive movers in the latest trends data.

Lean Hogs (-37 percent) leads the downside trend scores currently with Coffee (-14 percent), Soybean Oil (-11 percent) and Wheat (-8 percent) following next with lower trend scores.

Strength Trend Statistics:
Corn (8.3 percent) vs Corn previous week (9.4 percent)
Sugar (-2.7 percent) vs Sugar previous week (1.2 percent)
Coffee (-13.6 percent) vs Coffee previous week (-12.4 percent)
Soybeans (13.5 percent) vs Soybeans previous week (25.4 percent)
Soybean Oil (-11.3 percent) vs Soybean Oil previous week (-4.7 percent)
Soybean Meal (7.5 percent) vs Soybean Meal previous week (20.5 percent)
Live Cattle (9.3 percent) vs Live Cattle previous week (23.7 percent)
Lean Hogs (-36.8 percent) vs Lean Hogs previous week (-27.8 percent)
Cotton (2.6 percent) vs Cotton previous week (-8.2 percent)
Cocoa (1.6 percent) vs Cocoa previous week (9.6 percent)
Wheat (-7.6 percent) vs Wheat previous week (-1.9 percent)

Individual Soft Commodities Markets:

CORN Futures:

The CORN large speculator standing this week resulted in a net position of 277,369 contracts in the data reported through Tuesday. This was a weekly boost of 5,496 contracts from the previous week which had a total of 271,873 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 65.5 percent. The commercials are Bearish with a score of 42.6 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 2.1 percent.

CORN Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	30.5	43.8	9.0
– Percent of Open Interest Shorts:	8.7	60.0	14.7
– Net Position:	277,369	-205,662	-71,707
– Gross Longs:	388,317	558,456	115,106
– Gross Shorts:	110,948	764,118	186,813
– Long to Short Ratio:	3.5 to 1	0.7 to 1	0.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	65.5	42.6	2.1
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	8.3	-4.6	-22.3

SUGAR Futures:

The SUGAR large speculator standing this week resulted in a net position of 185,084 contracts in the data reported through Tuesday. This was a weekly lowering of -1,614 contracts from the previous week which had a total of 186,698 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 57.6 percent. The commercials are Bearish with a score of 37.4 percent and the small traders (not shown in chart) are Bullish with a score of 62.6 percent.

SUGAR Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	29.2	43.8	9.8
– Percent of Open Interest Shorts:	9.2	68.6	5.1
– Net Position:	185,084	-229,339	44,255
– Gross Longs:	270,150	404,948	91,086
– Gross Shorts:	85,066	634,287	46,831
– Long to Short Ratio:	3.2 to 1	0.6 to 1	1.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	57.6	37.4	62.6
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-2.7	-0.2	10.8

COFFEE Futures:

The COFFEE large speculator standing this week resulted in a net position of -22,728 contracts in the data reported through Tuesday. This was a weekly gain of 4,017 contracts from the previous week which had a total of -26,745 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 4.1 percent. The commercials are Bullish-Extreme with a score of 95.9 percent and the small traders (not shown in chart) are Bearish with a score of 35.1 percent.

COFFEE Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	19.6	52.9	4.6
– Percent of Open Interest Shorts:	29.4	44.2	3.5
– Net Position:	-22,728	20,167	2,561
– Gross Longs:	45,404	122,400	10,598
– Gross Shorts:	68,132	102,233	8,037
– Long to Short Ratio:	0.7 to 1	1.2 to 1	1.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	4.1	95.9	35.1
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-13.6	11.6	21.5

SOYBEANS Futures:

The SOYBEANS large speculator standing this week resulted in a net position of 155,222 contracts in the data reported through Tuesday. This was a weekly decline of -13,843 contracts from the previous week which had a total of 169,065 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 59.4 percent. The commercials are Bullish with a score of 52.5 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 8.0 percent.

SOYBEANS Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	30.9	46.6	6.9
– Percent of Open Interest Shorts:	7.7	64.3	12.5
– Net Position:	155,222	-117,945	-37,277
– Gross Longs:	206,329	311,307	46,219
– Gross Shorts:	51,107	429,252	83,496
– Long to Short Ratio:	4.0 to 1	0.7 to 1	0.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	59.4	52.5	8.0
– Strength Index Reading (3 Year Range):	Bullish	Bullish	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	13.5	-11.7	-10.6

SOYBEAN OIL Futures:

The SOYBEAN OIL large speculator standing this week resulted in a net position of 39,250 contracts in the data reported through Tuesday. This was a weekly lowering of -20,245 contracts from the previous week which had a total of 59,495 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 29.9 percent. The commercials are Bullish with a score of 72.2 percent and the small traders (not shown in chart) are Bearish with a score of 33.1 percent.

SOYBEAN OIL Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	20.1	50.6	8.7
– Percent of Open Interest Shorts:	10.3	61.6	7.4
– Net Position:	39,250	-44,514	5,264
– Gross Longs:	80,599	203,133	34,963
– Gross Shorts:	41,349	247,647	29,699
– Long to Short Ratio:	1.9 to 1	0.8 to 1	1.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	29.9	72.2	33.1
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-11.3	15.1	-28.4

SOYBEAN MEAL Futures:

The SOYBEAN MEAL large speculator standing this week resulted in a net position of 149,785 contracts in the data reported through Tuesday. This was a weekly decline of -16,565 contracts from the previous week which had a total of 166,350 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 92.3 percent. The commercials are Bearish-Extreme with a score of 7.8 percent and the small traders (not shown in chart) are Bearish with a score of 32.6 percent.

SOYBEAN MEAL Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	40.1	32.9	11.7
– Percent of Open Interest Shorts:	4.5	73.2	7.1
– Net Position:	149,785	-169,008	19,223
– Gross Longs:	168,470	138,088	49,137
– Gross Shorts:	18,685	307,096	29,914
– Long to Short Ratio:	9.0 to 1	0.4 to 1	1.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	92.3	7.8	32.6
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	7.5	-7.7	3.2

LIVE CATTLE Futures:

The LIVE CATTLE large speculator standing this week resulted in a net position of 66,228 contracts in the data reported through Tuesday. This was a weekly decrease of -7,915 contracts from the previous week which had a total of 74,143 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 62.4 percent. The commercials are Bearish with a score of 27.2 percent and the small traders (not shown in chart) are Bullish with a score of 70.4 percent.

LIVE CATTLE Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	37.0	30.6	11.2
– Percent of Open Interest Shorts:	16.1	50.4	12.2
– Net Position:	66,228	-62,823	-3,405
– Gross Longs:	117,249	96,720	35,368
– Gross Shorts:	51,021	159,543	38,773
– Long to Short Ratio:	2.3 to 1	0.6 to 1	0.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	62.4	27.2	70.4
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	9.3	-10.5	1.4

LEAN HOGS Futures:

The LEAN HOGS large speculator standing this week resulted in a net position of 3,166 contracts in the data reported through Tuesday. This was a weekly fall of -12,741 contracts from the previous week which had a total of 15,907 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.4 percent. The commercials are Bullish-Extreme with a score of 96.9 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 95.4 percent.

LEAN HOGS Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	32.3	36.7	11.3
– Percent of Open Interest Shorts:	30.8	37.0	12.5
– Net Position:	3,166	-682	-2,484
– Gross Longs:	66,938	75,927	23,357
– Gross Shorts:	63,772	76,609	25,841
– Long to Short Ratio:	1.0 to 1	1.0 to 1	0.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	0.4	96.9	95.4
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-36.8	27.7	47.8

COTTON Futures:

The COTTON large speculator standing this week resulted in a net position of 17,833 contracts in the data reported through Tuesday. This was a weekly increase of 9,880 contracts from the previous week which had a total of 7,953 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 20.9 percent. The commercials are Bullish with a score of 79.2 percent and the small traders (not shown in chart) are Bearish with a score of 22.2 percent.

COTTON Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	29.6	48.5	6.2
– Percent of Open Interest Shorts:	21.0	58.0	5.3
– Net Position:	17,833	-19,679	1,846
– Gross Longs:	61,599	100,981	12,918
– Gross Shorts:	43,766	120,660	11,072
– Long to Short Ratio:	1.4 to 1	0.8 to 1	1.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	20.9	79.2	22.2
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	2.6	-3.4	9.5

COCOA Futures:

The COCOA large speculator standing this week resulted in a net position of 24,941 contracts in the data reported through Tuesday. This was a weekly decrease of -2,757 contracts from the previous week which had a total of 27,698 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 41.5 percent. The commercials are Bullish with a score of 58.8 percent and the small traders (not shown in chart) are Bearish with a score of 36.9 percent.

COCOA Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	31.1	47.3	4.3
– Percent of Open Interest Shorts:	22.6	57.2	2.9
– Net Position:	24,941	-28,978	4,037
– Gross Longs:	90,986	138,394	12,460
– Gross Shorts:	66,045	167,372	8,423
– Long to Short Ratio:	1.4 to 1	0.8 to 1	1.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	41.5	58.8	36.9
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	1.6	-2.3	6.9

WHEAT Futures:

The WHEAT large speculator standing this week resulted in a net position of -48,320 contracts in the data reported through Tuesday. This was a weekly fall of -6,306 contracts from the previous week which had a total of -42,014 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 99.5 percent.

WHEAT Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	25.3	40.7	9.7
– Percent of Open Interest Shorts:	39.1	26.3	10.3
– Net Position:	-48,320	50,423	-2,103
– Gross Longs:	88,787	142,422	33,981
– Gross Shorts:	137,107	91,999	36,084
– Long to Short Ratio:	0.6 to 1	1.5 to 1	0.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	0.0	100.0	99.5
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-7.6	8.2	4.5

Article By InvestMacro – Receive our weekly COT Newsletter

COT Updates Opinions Soft Commodities

26 Jan

How California’s ambitious new climate plan could help speed energy transformation around the world

By Daniel Sperling, University of California, Davis

California is embarking on an audacious new climate plan that aims to eliminate the state’s greenhouse gas footprint by 2045, and in the process, slash emissions far beyond its borders. The blueprint calls for massive transformations in industry, energy and transportation, as well as changes in institutions and human behaviors.

These transformations won’t be easy. Two years of developing the plan have exposed myriad challenges and tensions, including environmental justice, affordability and local rule.

For example, the San Francisco Fire Commission had prohibited batteries with more than 20 kilowatt-hours of power storage in homes, severely limiting the ability to store solar electricity from rooftop solar panels for all those times when the sun isn’t shining. More broadly, local opposition to new transmission lines, large-scale solar and wind facilities, substations for truck charging, and oil refinery conversions to produce renewable diesel will slow the transition.

I had a front row seat while the plan was prepared and vetted as a longtime board member of the California Air Resources Board, the state agency that oversees air pollution and climate control. And my chief contributor to this article, Rajinder Sahota, is deputy executive officer of the board, responsible for preparing the plan and navigating political land mines.

We believe California has a chance of succeeding, and in the process, showing the way for the rest of the world. In fact, most of the needed policies are already in place.

What happens in California has global reach

What California does matters far beyond state lines.

California is close to being the world’s fourth-largest economy and has a history of adopting environmental requirements that are imitated across the United States and the world. California has the most ambitious zero-emission requirements in the world for cars, trucks and buses; the most ambitious low-carbon fuel requirements; one of the largest carbon cap-and-trade programs; and the most aggressive requirements for renewable electricity.

In the U.S., through peculiarities in national air pollution law, other states have replicated many of California’s regulations and programs so they can race ahead of national policies. States can either follow federal vehicle emissions standards or California’s stricter rules. There is no third option. An increasing number of states now follow California.

So, even though California contributes less than 1% of global greenhouse gas emissions, if it sets a high bar, its many technical, institutional and behavioral innovations will likely spread and be transformative.

What’s in the California blueprint

The new Scoping Plan lays out in considerable detail how California intends to reduce greenhouse gas emissions 48% below 1990 levels by 2030 and then achieve carbon neutrality by 2045.

It calls for a 94% reduction in petroleum use between 2022 and 2045 and an 86% reduction in total fossil fuel use. Overall, it would cut greenhouse gas emissions by 85% by 2045 relative to 1990 levels. The remaining 15% reduction would come from capturing carbon from the air and fossil fuel plants, and sequestering it below ground or in forests, vegetation and soils.

To achieve these goals, the plan calls for a 37-fold increase in on-road zero-emission vehicles, a sixfold increase in electrical appliances in residences, a fourfold increase in installed wind and solar generation capacity, and doubling total electricity generation to run it all. It also calls for ramping up hydrogen power and altering agriculture and forest management to reduce wildfires, sequester carbon dioxide and reduce fertilizer demand.

This is a massive undertaking, and it implies a massive transformation of many industries and activities.

Transportation: California’s No. 1 emitter

Transportation accounts for about half of the state’s greenhouse gas emissions, including upstream oil refinery emissions. This is where the path forward is perhaps most settled.

The state has already adopted regulations requiring almost all new cars, trucks and buses to have zero emissions – new transit buses by 2029 and most truck sales and light-duty vehicle sales by 2035.

In addition, California’s Low Carbon Fuel Standard requires oil companies to steadily reduce the carbon intensity of transportation fuels. This regulation aims to ensure that the liquid fuels needed for legacy cars and trucks still on the road after 2045 will be low-carbon biofuels.

But regulations can be modified and even rescinded if opposition swells. If battery costs do not resume their downward slide, if electric utilities and others lag in providing charging infrastructure, and if local opposition blocks new charging sites and grid upgrades, the state could be forced to slow its zero-emission vehicle requirements.

The plan also relies on changes in human behavior. For example, it calls for a 25% reduction in vehicle miles traveled in 2030 compared with 2019, which has far dimmer prospects. The only strategies likely to significantly reduce vehicle use are steep charges for road use and parking, a move few politicians or voters in the U.S. would support, and a massive increase in shared-ride automated vehicles, which are not likely to scale up for at least another 10 years. Additional charges for driving and parking raise concerns about affordability for low-income commuters.

Electricity and electrifying buildings

The key to cutting emissions in almost every sector is electricity powered by renewable energy.

Electrifying most everything means not just replacing most of the state’s natural gas power plants, but also expanding total electricity production – in this case doubling total generation and quadrupling renewable generation, in just 22 years.

That amount of expansion and investment is mind-boggling – and it is the single most important change for reaching net zero, since electric vehicles and appliances depend on the availability of renewable electricity to count as zero emissions.

Electrification of buildings is in the early stages in California, with requirements in place for new homes to have rooftop solar, and incentives and regulations adopted to replace natural gas use with heat pumps and electric appliances.

The biggest and most important challenge is accelerating renewable electricity generation – mostly wind and utility-scale solar. The state has laws in place requiring electricity to be 100% zero emissions by 2045 – up from 52% in 2021.

The plan to get there includes offshore wind power, which will require new technology – floating wind turbines. The federal government in December 2022 leased the first Pacific sites for offshore wind farms, with plans to power over 1.5 million homes. However, years of technical and regulatory work are still ahead.

For solar power, the plan focuses on large solar farms, which can scale up faster and at less cost than rooftop solar. The same week the new scoping plan was announced, California’s Public Utility Commission voted to significantly scale back how much homeowners are reimbursed for solar power they send to the grid, a policy known as net metering. The Public Utility Commission argues that because of how electricity rates are set, generous rooftop solar reimbursements have primarily benefited wealthier households while imposing higher electricity bills on others. It believes this new policy will be more equitable and create a more sustainable model.

Industry and the carbon capture challenge

Industry plays a smaller role, and the policies and strategies here are less refined.

The state’s carbon cap-and-trade program, designed to ratchet down total emissions while allowing individual companies some flexibility, will tighten its emissions limits.

But while cap-and-trade has been effective to date, in part by generating billions of dollars for programs and incentives to reduce emissions, its role may change as energy efficiency improves and additional rules and regulations are put in place to replace fossil fuels.

One of the greatest controversies throughout the Scoping Plan process is its reliance on carbon capture and sequestration, or CCS. The controversy is rooted in concern that CCS allows fossil fuel facilities to continue releasing pollution while only capturing the carbon dioxide emissions. These facilities are often in or near disadvantaged communities.

California’s chances of success

Will California make it? The state has a track record of exceeding its goals, but getting to net zero by 2045 requires a sharper downward trajectory than even California has seen before, and there are still many hurdles.

Environmental justice concerns about carbon capture and new industrial facilities, coupled with NIMBYism, could block many needed investments. And the possibility of sluggish economic growth could led to spending cuts and might exacerbate concerns about economic disruption and affordability.

There are also questions about prices and geopolitics. Will the upturn in battery costs in 2022 – due to geopolitical flare-ups, a lag in expanding the supply of critical materials, and the war in Ukraine – turn out to be a hiccup or a trend? Will electric utilities move fast enough in building the infrastructure and grid capacity needed to accommodate the projected growth in zero-emission cars and trucks?

It is encouraging that the state has already created just about all the needed policy infrastructure. Additional tightening of emissions limits and targets will be needed, but the framework and policy mechanisms are largely in place.

Rajinder Sahota, deputy executive officer of the California Air Resources Board, contributed to this article.

About the Author:

Daniel Sperling, Distinguished Blue Planet Prize Professor of Civil and Environmental Engineering and Founding Director, Institute of Transportation Studies, University of California, Davis

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Energy Opinions

25 Jan

Mid-Week Technical Outlook: Breakouts In Focus

By ForexTime

European shares struggled for direction on Wednesday as investors awaited corporate earnings for fresh directional cues ahead of a busy week for financial markets.

The overall mood has been dampened by mass layoffs in the tech space and signs of slowing global growth. With recession fears sapping risk appetite, stock markets remain vulnerable to further losses. In the currency space, the dollar seems to be drawing strength from risk aversion – dragging other G10 currencies lower. Regarding commodities, oil prices remain shaky while gold has slipped from a nine-month high.

Some trading opportunities may be forming during this period of uneasy calm and growing tension. Our tool of choice this afternoon will be technical analysis with our focus falling on currencies, commodities, and indices.

GBPUSD trapped within range

It has been a choppy affair for the GBPUSD over the past few days. Prices remain trapped within a range with support at 1.2150 and resistance at 1.2450. A breakout could be on the horizon but this may need the assistance of a fresh directional catalyst. Although prices are trading above the 50, 100, and 200-day SMA, bears seem to be back in the vicinity. Prices may test the 1.2150 level in the short to medium term. A breakdown below this point could open a path back toward 1.2000.

USDJPY to resume downside

USDJPY remains under pressure on the weekly timeframe as there have been consistently lower lows and lower highs. Prices are trading below 130.00 and could challenge 126.50 in the short to medium term. A strong breakdown below 126.50 may open the doors toward 122.00. If prices are able to push back above 130.00, the next key point can be found at 133.20.

AUDUSD approaches resistance

Aussie bulls continue to draw strength from dollar weakness. After breaking above the 0.7000 level, prices have pushed higher, with 0.7135 acting as a key point of interest. A breakout above this level could suggest an incline towards 0.7250. Should prices slip back below 0.7000, the AUDUSD may decline toward 0.6900.

USDCAD gearing for breakdown?

USDCAD could be on the brink of a breakdown as prices wobble above the 1.3350 support level. A solid move below this point could open the doors towards 1.3240 and potentially lower. Should 1.3350 prove to be reliable support, a rebound back toward 1.3500 could be on the cards.

Gold bull’s still in control

Zooming out on the weekly charts, gold remains firmly bullish on the weekly timeframe. There have been consistently higher highs and higher lows while the MACD trades above zero. A solid breakout and weekly close above $1940 may trigger an incline toward the psychological $2000 level. Should $1940 prove to be a tough nut to crack, the precious metal may dip back toward $1900.

S&P 500 remains rangebound

The S&P500 has been trapped within a wide range since May 2022. May support can be found around 3600 and resistance at 4300 on the monthly timeframe. Given the various fundamental forces influencing global sentiment, a breakout could be on the horizon. A strong breakout above 4300 could open a path towards 4819.5. Alternatively, a selloff below 3600 could signal a further decline towards 3250.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Forex and Currency News Opinions

24 Jan

Is Gold’s Rally Vulnerable, as Fed Readies To Meet?

Source: Adrian Day (1/23/23)

Adrian Day of Adrian Day Asset Management reviews recent results from several resource companies, mostly positive, though cost increases are an issue everywhere.

Gold has moved ahead on expectations that the Federal Reserve will start to slow and then pause its tightening program. There have been several indications of this since the last Fed policy meeting, including chairman Jerome Powell’s comment at his December press conference that the Fed would not start to cut interest rates “until we are convinced that inflation is moving down towards 2%”, a quite different matter than inflation actually being at 2%. Then in the last week, several Fed officials said “not so fast,” but some of those, such as James Bullard, who called for a half-point increase later this month and another full percentage point this year, are no longer voting members of the rate-setting committee.

But we know the Fed, and particularly Mr. Powell, are concerned at markets discounting the Fed’s message. They are less concerned about the gold market than they are about stocks, bonds, and other assets, but certainly, gold is vulnerable to a pullback after the 18% move since early November. A quarter-point rate increase is now seen as almost certain; it is very unlikely to be less than that, so any surprise is likely to be on the upside, that is, negative for markets and gold.

We remain very positive for the balance of the year, but some trimming of gold stocks and certainly caution in new buys, would not be out of place.

Pending Acquisition of Yamana Overshares Pan American’s Solid Quarter

Pan American Silver Corp. (PAAS:TSX; PAAS:NASDAQ) reported strong production in the last quarter of the year and probably the last full quarter before the acquisition of Yamana, ending a string of disappointing quarterly results. In its preliminary production report, Pan Am said it met its previously reduced guidance, with gold production up 28% on the prior quarter, while silver output rose 5%; zinc and lead, the two primary non-precious metals, also were up meaningfully.

Though the results were positive, they were overshadowed by the pending acquisition of Yamana, which is expected to close sometime this quarter. The deal is accretive for Pan Am and arguably improves the aggregate quality of its mines. We expect to see the company sell some higher-cost or shorter-life assets, thus reducing its purchase cost. Pan Am said it expects to discuss 2023 guidance after the transaction is complete.

Pan American is trading at a discount to both major miners and to other silver-focused companies. Although we are very positive about the stock longer term, especially with the possibility of Escobal in Guatemala coming back online at some point, we are cautious in the near term. We may see some selling from shareholders who own too much of the combined company or Yamana shareholders unhappy with the transaction, and given that Yamana shareholders will hold nearly half of the combined company, this could be meaningful. Hold.

An Osisko Asset Moves Forward

Osisko Gold Royalties Ltd. (OR:TSX; OR:NYSE) received more good news, with the first resource estimate on Osisko Development’s Tintic project in Utah. The Trixie Zone has 456,000 ounces of gold at an average grade of 23.5 g/t., the resource covering only about 10% of the footprint on limited drilling (50 drill holes). The resource should get to one million ounces, at similar grades, for a high-grade mine expected to commence production in early 2024. Osisko Gold holds a 2.5% metals stream on the project, payable at 25% of the spot prices at delivery; it paid $20 million for the stream.

This is a good example of the benefits that Osisko derives from its offspring. And it is only one of more than a dozen projects advancing this year. Given the strong rally, both since early November (up 34%) and the last few days (traded under $13 on Tuesday), we will wait for a pullback to add. Hold.

Fortuna Delivers Another Solid Quarter

Fortuna Silver Mines Inc. (FSM:NYSE; FVI:TSX; FVI:BVL; F4S:FSE) also reported a solid fourth quarter, with gold and silver production both in line with full-year guidance, while lead and zinc exceeded guidance somewhat. Gold production was above many analyst expectations, although costs were up, at most mines around 15%, driven by sustaining capital spending. This quarter represents another consecutive quarter where Fortuna’s operations have met or exceeded expectations after a frustrating series of issues in 2021 and early 2022. Construction at Séguéla remains on track, with the first gold expected in the second quarter after mining begins this quarter.

The company is initiating action in Mexico, on both the judicial and political front, over the last reversal of its permit for San Jose. The company is looking for an increase in gold-equivalent ounces this year of between 3% and 15% over last year, driven by a 25% increase in gold as Séguéla comes on stream. Gold production is expected at between 282Kk and 320K, as much as a 23% increase, while silver output is expected to decline by up to 9% to 6.3 million to 6.9 million ounces.

Strong management, a solid balance sheet, a diversified asset base, and growth ahead: Fortuna can be accumulated here and bought aggressively on any dips.

Barrick Disappoints on Production and Costs

Barrick Gold Corp. (ABX:TSX; GOLD:NYSE) had a disappointing quarter, even though it was the strongest for gold production of any this past year. Gold output was up 13% over the prior quarter, but that was not sufficient to save full-year production, which at 4.14 million ounces, was below the low end of the company’s guidance. The company’s assertion last quarter that it would still meet guidance was treated somewhat skeptically by many analysts. Though copper production was down 5% from the prior quarter and below some estimates, it still came in within the full-year guidance range.

Costs were also disappointing; although down slightly from the third quarter, largely due to higher volumes, costs were higher than management was indicating. Given the results, it is likely that the variable quarterly dividend will decline to the base of 10 cents a share. Separately, Barrick announced a time frame for its new Reko Diq copper project in Pakistan, with a feasibility update expected to be completed by the end of next year, with 2028 targeted for the first production, as indicated previously. Barrick is the 50% owner and the operator.

Barrick remains inexpensive, both fundamentally and in relation to his historical average valuations. However, we would like to see a pullback before buying, given the strong rally in recent months (the stock was at $13.10 in early November).

Midland Has Another Busy Year Ahead

Midland Exploration Inc. (MD:TSX.V) released an overview of its exploration plans for the coming year, expecting a budget of over $11 million with 20,000 meters of diamond drilling. Its plans for 2023 are aimed at following up on new discoveries made throughout 2022. Midland is working on several projects in partnership with others, including BHP, Rio Tino, SOQUEM, Probe, and Wallbridge. The company will also advance several of its wholly-owned properties. Given the activity, the strong management, and the balance sheet, Midland is a strong buy at the current level.

TOP BUYS THIS WEEK, in addition to the above, include Orogen Royalties Inc. (OGN:TSX.V). As we have said for the last couple of weeks, we are generally cautious on buying right now, given valuations in the broad market and following the strong gold-stock move in the last couple of months. Patience will pay off!

Adrian Day Disclosures:

Adrian Day’s Global Analyst is distributed for $990 per year by Investment Consultants International, Ltd., P.O. Box 6644, Annapolis, MD 21401. (410) 224-8885. www.AdrianDayGlobalAnalyst.com. Publisher: Adrian Day. Owner: Investment Consultants International, Ltd. Staff may have positions in securities discussed herein. Adrian Day is also President of Global Strategic Management (GSM), a registered investment advisor, and a separate company from this service. In his capacity as GSM president, Adrian Day may be buying or selling for clients securities recommended herein concurrently, before or after recommendations herein, and may be acting for clients in a manner contrary to recommendations herein. This is not a solicitation for GSM. Views herein are the editor’s opinion and not fact. All information is believed to be correct, but its accuracy cannot be guaranteed. The owner and editor are not responsible for errors and omissions. © 2022. Adrian Day’s Global Analyst. Information and advice herein are intended purely for the subscriber’s own account. Under no circumstances may any part of a Global Analyst e-mail be copied or distributed without prior written permission of the editor. Given the nature of this service, we will pursue any violations aggressively.

Disclosures:

1) Adrian Day: I, or members of my immediate household or family, own securities of the following companies mentioned in this article: All. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: None. Funds controlled by Adrian Day Asset Management, which is unaffiliated with Adrian Day’s newsletter, hold shares of the following companies mentioned in this article: All. I determined which companies would be included in this article based on my research and understanding of the sector.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.

3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.

4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services, or securities of any company mentioned on Streetwise Reports.

5) From time to time, Streetwise Reports LLC and its directors, officers, employees, or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in the securities mentioned. Directors, officers, employees, or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company release.

Metals Opinions

Risk Disclosure: Foreign Currency trading and trading on margin carries a high level of risk and can result in loss of part or all of your investment. Due to the level of risk and market volatility, Foreign Currency trading may not be suitable for all investors and you should not invest money you cannot afford to lose. Before deciding to invest in the foreign currency exchange market you should carefully consider your investment objectives, level of experience, and risk appetite. You should be aware of all the risks associated with foreign currency exchange trading, and seek advice from an independent financial advisor should you have any doubts.

All information and opinions on this website are for general informational purposes only and do not constitute investment advice.

Archive for Opinions – Page 101

Dollar’s collapse

Loss of political power too

Rivals rewarded

Severe consequences

the US Federal Reserve (a.k.a. the Fed) vs. the Bank of England (BOE).

Generally, the central bank that can keep raising its interest rates further while its economy can withstand those higher rates (relative to another central bank’s benchmark rates/economy) typically sees its currency strengthen.

According to Bloomberg’s FX forecast model, there’s a 72% chance that GBPUSD trades within the 1.2182 – 1.2614 range this week.

What are markets expecting the Fed and the BOE to do?

Overall, if the BOE confirms this week that it can officially out-hike the Fed, not just this week but also over the coming months, that could trigger the next leg up for GBPUSD.

However, we could be in for a SURPRISE this week, if the:

The above scenario (dovish BOE + still-hawkish Fed) may then trigger GBPUSD into unwinding some of its recent gains.

Key levels for GBPUSD:

At the time of writing, from current levels just below 1.24, Bloomberg’s FX model is pointing to a slightly likelier chance that GBPUSD would dip below 1.22 (16.5% chance) rather than breach the 1.26 mark (15% chance).

Weekly Speculator Changes led by EuroFX & US Dollar Index

Strength Scores led by EuroFX & Brazilian Real

New Zealand Dollar & Brazilian Real top the 6-Week Strength Trends

Individual COT Forex Markets:

US Dollar Index Futures:

Euro Currency Futures:

British Pound Sterling Futures:

Japanese Yen Futures:

Swiss Franc Futures:

Canadian Dollar Futures:

Australian Dollar Futures:

New Zealand Dollar Futures:

Mexican Peso Futures:

Brazilian Real Futures:

Bitcoin Futures:

Weekly Speculator Changes led by Fed Funds & 5-Year Bonds

Strength Scores led by Fed Funds & Eurodollar

Eurodollar & 2-Year Bonds top the 6-Week Strength Trends

Individual Bond Markets:

3-Month Eurodollars Futures:

30-Day Federal Funds Futures:

2-Year Treasury Note Futures:

5-Year Treasury Note Futures:

10-Year Treasury Note Futures:

Ultra 10-Year Notes Futures:

US Treasury Bonds Futures:

Ultra US Treasury Bonds Futures:

Here Are This Week’s Most Bullish Speculator Positions:

Soybean Meal

Heating Oil

Euro

VIX

Brazil Real

This Week’s Most Bearish Speculator Positions:

Wheat

Ultra 10-Year U.S. T-Note

Lean Hogs

10-Year Note

MSCI EAFE MINI

Speculators or Non-Commercials Notes:

Weekly Speculator Changes led by Gold & Copper

Strength Scores led by Copper & Silver

Copper & Gold top the 6-Week Strength Trends

Individual Markets:

Gold Comex Futures:

Silver Comex Futures:

Copper Grade #1 Futures:

Platinum Futures:

Palladium Futures:

Weekly Speculator Changes led by Cotton & Corn

Strength Scores led by Soybean Meal & Corn

Soybeans & Live Cattle top the 6-Week Strength Trends

Individual Soft Commodities Markets:

CORN Futures:

SUGAR Futures:

COFFEE Futures:

SOYBEANS Futures:

SOYBEAN OIL Futures:

SOYBEAN MEAL Futures:

LIVE CATTLE Futures:

LEAN HOGS Futures:

COTTON Futures:

COCOA Futures:

WHEAT Futures:

What happens in California has global reach

What’s in the California blueprint